Thu, May 26, 2011 - Page 12 News List

M1B gauge slows the most in two years

By Amy Su  /  Staff Reporter

The annual growth of M1B money supply decelerated to the slowest in more than two years last month because of reduced demand for bank loans and private investments, the central bank said yesterday.

M1B, a narrow measure of money supply indicating capital momentum in the stock market, rose 8.17 percent last month from a year ago, down from 9.22 percent year-on-year growth in March, the central bank said.

Last month’s reading marked the weakest annual growth since March 2009, the bank’s data showed.

“Although last month’s growth of M1B decelerated, the momentum of currency in circulation remains abundant for now,” Chen E-dawn (陳一端), deputy chief of the bank’s economic research department, said at a media briefing.

Foreign-held New Taiwan dollar deposits decreased by NT$4.1 billion (US$141.34 million) to NT$249.2 billion last month from a month earlier, indicating that -foreign investors are diverting part of their deposits in Taiwan toward the local stock market, Chen said.

The inflow of net foreign capital totaled US$4.39 billion last month, indicating the nation’s market liquidity remains healthy, she added.

The broader M2 monetary measurement, which includes M1B, time deposits, savings deposits, foreign currency deposits and mutual funds, increased 5.88 percent year-on-year last month, slightly down from 5.97 percent in March, central bank data showed.

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